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Citizens United v. Schneiderman

United States Court of Appeals for the Second Circuit · 2018 · Constitutional Law

Constitutional LawFirst AmendmentDue ProcessPreemptionNonprofit Disclosuredonor disclosureSchedule Bcharitable solicitation

Facts

The plaintiffs are nonprofit organizations exempt under IRC §§ 501(c)(3) and 501(c)(4) that solicit donations nationwide, including in New York. New York requires charitable organizations to register before soliciting and to file annual disclosures including IRS Form 990 and its schedules; applicable law bars public disclosure of Schedule B donor identities. Although the plaintiffs had filed Form 990 for years, they submitted only the first page of Schedule B and omitted donor-identifying information, and before 2013 the Attorney General had not objected. Beginning in 2013, the Attorney General sent yearly deficiency notices warning of noncompliance and potential penalties, including fines and loss of solicitation privileges, but no penalties beyond notices had yet been imposed.

Issue

Do New York's annual donor-disclosure requirements for nonprofits soliciting in the state violate the First Amendment by chilling association or operating as a prior restraint, violate due process because enforcement increased without advance notice, become preempted by the Internal Revenue Code, or exceed the Attorney General's authority by covering 501(c)(4) organizations?

Rule

Content-neutral disclosure requirements are reviewed under exacting scrutiny, which requires a substantial relation between the disclosure requirement and a sufficiently important governmental interest, with the strength of the interest measured against the seriousness of the actual burden on First Amendment rights. A plaintiff challenging disclosure on associational-privacy grounds must plead well-pleaded facts showing a likelihood of a substantial restraint on association or a reasonable probability that disclosure will subject contributors to threats, harassment, or reprisals. A facially content-neutral licensing or permit regime constitutes a prior restraint only when it requires prior governmental permission for expression and vests officials with enough discretion to be abused. A change in enforcement priorities does not violate due process absent a change in the legal standard of prohibited or required conduct.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

The attorney general of Illinois requires all nonprofits that solicit contributions in Chicago to file annually a confidential donor schedule that mirrors information they already submit to the IRS. Prairie Values Forum, a nonprofit advocacy group, sues, arguing that because its speech is political and controversial, the rule must satisfy strict scrutiny.

What is the strongest response to the nonprofit's First Amendment argument?

Explanation. Under the majority opinion, neutral donor-disclosure requirements are not inherently content based and are reviewed under exacting scrutiny, not strict scrutiny. Exacting scrutiny asks whether there is a substantial relation between the disclosure requirement and a sufficiently important governmental interest, with the required strength of the interest measured against the seriousness of the actual burden on First Amendment rights. The court rejected the idea that political or controversial advocacy alone converts a neutral disclosure rule into one subject to strict scrutiny.